Just make sure insurance has enough liquid$$capital to guarantee the worth of the ALL insurance sold... THAT'S ALL. (Derivatives do not count).
"'the problem we have now is that insurance being sold by people w no capital" ~Martin Wolf.
Dec 24, 2009: Better protection for clients: MAS consultation paper proposes 100% coverage subject to certain caps (By Gabriel Chen)
A SCHEME to protect policyholders if their insurer goes belly up is being strengthened.
The scheme now covers 90 per cent of an insurer's liability but under new proposals, coverage will be moved to 100 per cent subject to certain caps.
The Policyowners' Protection Fund (PPF) as it is called will provide compensation of up to $500,000 for the sum assured and $100,000 for the surrender value of all life and accident and health policies.
The PPF, which works like the deposit insurance that protects customers if a bank goes bust, compensates policyholders if an insurer defaults.
Insurers are expected to contribute a small sum every year to fund the scheme - so some of this cost could potentially be passed on to customers.
The PPF has never had to be used although it was frequently mentioned by insurance industry officials during the height of the global financial crisis last year.
Read the full story in Thursday's edition of The Straits Times. firstname.lastname@example.org